Working Paper No. 892

Nuclear Capacity Auctions

Published: December 15, 2011, revised January 2012 and June 2013Pages: 29Keywords: Capacity auctions; investments; market power; nuclear power; virtual power plantsJEL-codes: D44; L12; Q48
Published version

Nuclear Capacity Auctions Sven-Olof Fridolfsson and Thomas Tangerås


We propose nuclear capacity auctions as a means to improve the incentives for investing in nuclear power. In particular, capacity auctions open the market for large-scale entry by outside firms. Requiring licensees to sell a share of capacity as virtual power plant contracts increases auction efficiency by mitigating incumbent producers’ incentive to bid for market power. Our motivating example is Sweden’s recent decision to allow new nuclear power to replace old reactors.

Thomas Tangerås

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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